With bonuses imminent and most fixed income currencies and commodities staff expecting theirs to be large, buying someone out in November may seem lunacy. But UBS’s third quarter results illustrate why - even at this late stage in the year - it may be worthwhile.

Having scaled back its fixed income operations dramatically in 2008, UBS has had a change of heart. In the three months to September, it reportedly hired 30 senior traders and salespeople from rivals to rebuild its FICC business. And in September it was rumoured to have hired Paul Levy, formerly of Merrill Lynch in London, as head of its European credit structuring team,

The graph below (taken from UBS’s third quarter results presentation) suggests the hiring is paying off. .

UBS is still understood to be scouting for additional FICC headcount, along with Morgan Stanley, Nomura and Credit Suisse.

“If you’re trying to build a business, it doesn’t always make sense to wait until bonuses have been paid,” says David Reynolds at Scott Reynolds. “By the time notice periods have been worked through, it will be the middle of next year. In areas like rates there’s business to be done now.”

Predictably, however, it’s getting harder and harder to get new hires signed-off.

“Where there’s a clear and definable need, people are still being taken on, even now,” says Piers Benbow of Eden Search. “But if you’re hiring someone on three months’ notice to start in 2010 and they will be bought out using the 2009 bonus pool, they’ll need to be incredibly good.”

Analysts at Bernstein Research predict FICC should stay strong throughout, “at least the first half” of next year. Ominously, however, both SocGen and BNP Paribas said narrowing spreads were impacting margins when they announced their third quarter results this week.